A comparative analysis of three major financial crises : the Asian crisis, the Japanese ‘lost decade’ and the U.S. sub-prime mortgage crisis

Abstract

During the past years up until today, the world has gone through a number of financial and economic crises that had negatively impacted the global economy. The proposed study explores some underlying causes of various instances related to financial instability that had occurred during the mentioned dates. Moreover, it analyzes the effects of each crisis with respect to various distinctive factors as expressed in the methodology chapter. This study follows to find the similar causes and effects between the crises. This study compares and contrasts three major crises: the Asian crisis, the Japanese ‘Lost Decade’ and the U.S. sub-prime mortgage crisis, with the scope of identifying similarities and differences with regards to both factors that led to the crisis, as well as the ensuing consequences. Towards this end, this study employs two different but complementary methodological approaches: a qualitative approach, as well as a quantitative one. The qualitative approach examines the crises narratively, while the quantitative approach assesses them through the use of macroeconomic data. The researcher also discussed and assessed literature of different causes of the crisis from different viewpoints. To conclude, analysis was made to show different recommendations that were taken by the authority of the respective countries in order to achieve economic growth and financial stability following the hard times.